AGCO makes application to throw out EU VAT rebate ruling

Alistair Dunsmuir
By Alistair Dunsmuir June 19, 2014 11:12

The Association of Golf Course Owners (AGCO) has applied to the UK’s Upper Tribunal, Tax and Chancery Chamber to provide information that the EU ruling that VAT must not be applied to private members’ golf clubs’ green fees was based on flawed evidence.

If AGCO, which represents proprietary golf clubs, is successful, it could result in further delays to hundreds of private members’ (not-for-profit) golf clubs receiving hundreds of millions of pounds of VAT rebates, or even lead to a change in law.

However, one manager of a golf club that has made a claim has said AGCO is unlikely to be successful.

AGCO has also applied to the European Commission to take infraction proceedings over VAT in sport, after it carried out an investigation on green fees that were used at the lead golf club in the case, Bridport and West Dorset, throughout 2008 and 2009.

AGCO said it deployed a ‘team of amateur detectives’ who examined golfing events at Bridport and West Dorset between October 1, 2008 and September 30, 2009. They found that 47 events were sold to corporate bodies or societies, and several green fees were sold to individuals through booking agents.

“AGCO have rumbled the whole Bridport claim and we can report it was based on dodgy evidence to the court,” said AGCO chair Vivien Saunders.

“The legislation is all about supplies to individuals. VAT exemption for sport is for services provided by non-profit making organisations to persons, that is individuals. What KPMG hid from the court was that the £90,000 of green fees included lots of societies and corporate days – and they aren’t supplied to individuals.

“They also didn’t explain to the judge that some ‘green fees’ at golf clubs aren’t supplied by the club but by booking agents. And they certainly aren’t non-profit making organisations. This will apply to every golf club making a claim for a VAT refund on green fees.

“It’s fraud and a con. Hopefully HMRC will step in and save the country £500 million, based on this evidence.

”Personally I have endured a lot of unpleasantness from England Golf who will do anything they can to discredit AGCO. But the truth is out. We have blown the whistle.”

Over 450 golf clubs have joined with Bridport and West Dorset Golf Club to collectively claim back more than £115 million in VAT that has been spent on green fees. It is thought that several hundred other private members’ clubs have made similar, separate claims.

However, an anonymous manager of one of the clubs making a claim has said private members’ clubs should not worry about AGCO’s application.

“This is desperate stuff from Vivien and AGCO,” he said. “HMRC has previously ruled that corporate persons and unincorporated associations that take part in sport at sports’ clubs are ‘persons’ when it comes to VAT.

“This application is therefore not likely to be successful.”


Alistair Dunsmuir
By Alistair Dunsmuir June 19, 2014 11:12
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  1. Jenny Yu June 26, 16:20

    HMRC have finally changed their official advice for golf clubs re VAT, as of today:

    Reply to this comment
  2. Andy Lloyd-Skinner June 24, 15:51

    Apology accepted, we are very different organisations, but strangely with similar objectives in relation to the tax distortion issues although very different methods for trying to get there.
    Andy Lloyd-Skinner
    UK Golf Course Owners Association

    Reply to this comment
  3. Andy Lloyd-Skinner June 24, 14:43

    Message for John and Phil (postings of June 20th) and Max (June 24th).
    I find your comments about the UKGCOA baffling as well as incorrect. The facts have been outlined in Andrew Sutcliffe’s posting earlier today and I and Andrew Sutcliffe will be happy to meet with you to answer any further misconceptions you have of the UKGCOA. I am a struggling single site golf course owner, as are a majority of our members (we have 184 facilities as supporting members currently) and five of the UKGCOA Board members are single site owners. Our Chairman, Colin Mayes of Burhill and Board colleague Stephen Towers of Crown Golf have exactly the same interests as the single site owner in dealing with the tax issues, I struggle to understand the constant attacks made on the larger golf operator, England Golf, the private members sector and the UKGCOA as we are all in the golf industry and should be working together to strengthen golf as an industry. I cannot stress enough how much resolving the VAT distortion issue (as well as other EU and UK Government created distortions) means to me personally and the entire UKGCOA Board, it is priority no.1, but we don’t accept that attacking the integrity of the private members sector and England’s recognised governing body for the amateur golfer (our customers), as the right way forward for the golf industry.
    Please contact the UKGCOA office (see web site for details), leave your contact details and I will follow up to arrange to meet.
    Andy Lloyd-Skinner
    Chief Executive
    UK Golf Course Owners Association

    Reply to this comment
  4. David June 24, 14:04

    My apologies, I assumed the UKGCOA and the ACGO were the same.

    Reply to this comment
  5. David June 24, 12:07

    Thank you Andrew for posting a most helpful comment regarding the UKGCOA. I am delighted to hear that your organisation has ceased making accusations of fraud and tax-evasion toward non-profit making clubs and I am sure those clubs will wish you well in your appeals to the government.
    Of course it is the EU who rule us these days and it is they who have made it perfectly clear that it is sport that is the central issue and if amateur sport is played at a not for profit venue it is exempt from tax. What has clouded this issue is the subject of profit. Any profit made by not for profit clubs must be reinvested back into the sport and not distributed for personal gain.. Those private members not for profit clubs must be wary of remaining silent on this issue or be in danger of being dragged into a one size fits all taxation regime that would make all golf clubs the same for tax purposes. This could ultimately result in the end of the local golf club run by its members. There is an analogy here in that we once had local shops that are almost extinct due to the domination of supermarkets. The golf industry needs the larger commercially run golf clubs and the local members clubs. Any proposed changes to the current system must have the support of all otherwise those with the loudest voice may prevail at the expense of the silent majority.

    Reply to this comment
    • John June 26, 08:10


      There is massive fraud and Tax evasion going on at hundreds of so called ‘private members’ clubs, fact.

      I’ve seen accounts for many, many clubs some taking over £1 miilion per annum in green fees, visitors, guests, temporary members or what ever you want to call them and not paying any tax on that income and declaring they make a loss by allowing visitors onto the course.

      There’s 100’s of clubs with the wrong liqueur licences that are still catering for parties and weddings.

      How can a club claiming CASC offer accommodation for visiting golf parties ? or have a wedding co ordinator? or be able to hold wedding ceremonies? or have a restaurant open to the public? What do any of these have to do with a Community Aided Sports Club? How can any of these be not for profit activities? How much are these effecting local pubs and hotels that don’t get heavily subsidised rates?

      And yes, I’m sure it does go right to the top, was the finance director of england golf not at Notts (hollinwell) GC when they fraudulently registered as a CASC club? Although they had the decency to remove themselves from CASC (I wonder if they ever repaid any of the monies they saved on their rates?)

      Reply to this comment
      • CMoon June 26, 13:31

        So much misinformation here from people representing Private Clubs regarding how Members-Owned Clubs are run. I am the Secretary of a Members-Owned Club and can categorically state that all necessary licences are held, all visitors declared and all VAT properly paid for. To say that there is widespread fraud and deceit is totally untrue and no accountant worth his salt would sign-off a club’s year-end accounts if this was so. Simply put, Members-Owned Clubs are run by members to provide a golf facility, Private Clubs are run by a businessman (or woman) to do this AND to make themselves a profit.

        Reply to this comment
  6. Max June 24, 10:05

    Viv Saunders tireless work on the inequality between proprietary and member owned golf clubs is rightly congratulated and admired by the proprietary sector. In the face of stonewalling and inertia from ruling bodies in golf, HMRC and Government officials. She has exposed a widespread culture of cosy tax manipulation portraying all member owned clubs as folksy hackers clubs available to all and sundry, when in reality they are flat out commercial operations in order to enable them to protect their exclusivity. All this has been achieved by AGCO in the face of concerted opposition from non other than England Golf, who only pay lip service to the proprietary sector. Oh, and don’t be fooled into thinking that UKGCOA is the representative body for the proprietary sector of golf, it is just another mouthpiece set up by England Golf accommodating the interests of large golf course operators and not the interests of the vast majority of golf course owners.

    Reply to this comment
  7. Andrew Sutcliffe June 24, 08:15

    We would like to make it clear that the UK Golf Course Owners Association is an independent body. The UKGCOA is not connected, owned or influenced by England Golf and England Golf does not pay the UKGCOA’s costs. The UKGCOA
    relies on a small fee from it’s member clubs and sponsors income to cover costs. The accounts are available for members to see on the UKGCOA website.

    The UKGCOA exists to represent commercially minded golf owners and operators and at the top of the UKGCOA’s agenda is the taxation distortion issues. The UKGCOA communicates with England Golf, the other Home Country Unions, The Sports and Recreation Alliance and other appropriate sporting bodies in a collaborative and professional manner to lobby for essential changes for the good of the game in general. The key difference between the UKGCOA and some other parties involved in the tax distortion challenge is the UKGCOA recognises that it is not the fault of the private members sector the Government has provided it with unjustifiable tax advantages over the proprietary sector, the “enemy” in our fight for tax justice is the UK Government, not the private members sector. The UKGCOA does not see a
    benefit for golf, and particularly in relation to the tax distortion challenge, by creating disunity.

    As mentioned above the UKGCOA’s top priority is to get as close as European and UK laws allow to tax equality for golf course owners in the short to medium term, while participating strongly in consultations that may help to change the distorting tax laws in the longer term. Additionally, the UKGCOA works on other projects that have the potential to provide commercial benefits for commercial golf operators, details of such projects can be accessed through the members section of the UKGCOA web site or by contacting the UKGCOA office.

    Also please note to correct a regularly stated misrepresentation, the UKGCOA does not only represent multi course operators such as DeVere and Crown Golf. The majority of UKGCOA members are single golf course owners. Five of
    the UKGCOA Board members are single golf course owners as outlined on the UKGCOA web site.

    We hope that the above corrects just a few incorrect comments made about the UK Golf Course Owners Association.

    Andy Lloyd-Skinner, Chief Executive, UKGCOA & Andrew Sutcliffe UKGCOA Board member.

    Reply to this comment
  8. peter June 23, 06:25

    I find it hard to believe that there has been no comment from England Golf, I’m sure the author of this story must have contacted them for a quote on this as they where one of the main driving forces behind this when it started in 2008.

    Reply to this comment
  9. Andrew Smith June 22, 11:53

    I fully support Viv Saunders for all the work she has put into trying to get a level playing field in golf. It is not a proprietor’s fault that they may actually make a profit. Here we have turned over 150 acres to give our members & non-members the opportunity to enjoy golf in a great setting. I need a return to cover the huge borrowings of the last 25 years. Profits have been ploughed back to keep improving the standard of the course. When no profits I borrow more to keep the course going. When players go to other clubs they all have the same experience so why shouldn’t there be a level playing field.

    Re bingo – instead of charging green fees what would happen if we charged for a bingo card?

    Reply to this comment
  10. Trentparkgolf June 22, 05:55

    Thank Heavens for Vivian Saunders. The only voice representing Proprietary golf clubs in our battle for equal treatment on tax. Why should Sunningdale GC (and the many other so called private clubs) subsidise its Members to the tune of an estimated £3,000 each pa by trading commercially (and thus depriving commercial operators) to the tune of nearly £2,000,000 of turnover pa and not paying VAT on the Green Fee element or any Corporation Tax on the vast profits therefrom. Claiming, as they do, to make no taxable profits from over £1.4 million pa of Visitor Green Fees is beyond a joke. This blatent tax scam by the private clubs is the real cancer at the heart of our industry and government needs to act to bring these greedy private clubs to heel. It is quite disgusting that the ordinary golfers who play our course should be subsiding these wealthy elites via Corp Tax, VAT and CASC . Golf is the only sport where this huge distortion takes place to the detriment of commercial operators and it is just a question of tme until Vivians work on this bears fruit. We all owe here a huge debt of gratitude !

    Reply to this comment
  11. Phil June 20, 17:17

    We pay the VAT we charge our customers to the revenue while Members clubs who charge the same or more than us can keep all the green fees they receive. We have to make a profit to stay in business,it is impossible to run any golf club year in and year out without making a profit. I know two golf courses local to me who completely refurbish their locker rooms every three or four years simply to show a loss,they also levy members for jobs to be done that they can’t finance themselves , these levies remain on their accounts so that it would appear that they are in debt to their members even though they have no intention of repaying them. It has been mooted that if a golf club is sold for building then the proceeds would be distributed amongst the members. This might or might not happen, what certainley does happen is that if a member wants to leave he does not have anything to sell so walks away with nothing,how can he be an owner of the golf club. My club is a business that has to give a good service with no financial risk to the member, in member owned clubs the member is liable for all and any debts of the club.
    England Golf does not work for my cllub or my mebers ,they only serve mebers clubs and bully propriatory clubs to collect their fees for them . UKGCOA only serves the large conglomerates such as DeVere and Crown Golf. who are big enough to do their own deals with the revenue. AGCO is our only voice and without Viv Saunders we would be walked all over by people who seem to think they have a divine right to subsidised (by us) golf.

    Reply to this comment
  12. Alison Breton June 20, 13:56

    The AGCO is fighting for a set VAT rate for all golf courses – if the government can change the rate for Bingo, they can do it for a sport you can take up and play for the whole of your life, getting you active and healthy into old age. The only problem is that unlike the Bingo organisations, Golf Clubs can’t work together for this one end.

    Reply to this comment
  13. Vivien Saunders June 20, 12:49

    The Bridport case has opened a can of worms. Now HMRC realises that the member-owned clubs have taken some £3.5 billion of green fees since 1990, fiddled their corporation tax and are now asking for the VAT back. It is potentially the UK’s biggest ever fraud standing at a potential £500 million. The head solicitor of HMRC, the top civil servant in HMRC and politicians responded by return. The judge wrote me a personal letter by return post but clearly there is no procedural way for him to consider our evidence. The only people to go very quiet on this are KPMG and Bridport. The question is – Do members’ clubs want to participate in this fraud, pretending corporate days are temporary members, and that Tee off Times and Golf Breaks don’t act for them? Or shouldn’t they just admit that the Tribunal judge was hoodwinked? Our other question is why Bridport and why not Clitheroe GC who are clients of KPMG. Simple. Bridport actually pays tax on green fees. Clitheroe like most others don’t. Green fees are taxable. Associate, flexible memberships are taxable. HMRC now have their eyes open to the fiddles thanks to the Bridport claim. Most members clubs don’t even bother with liquor licenses and aren’t entitled to serve alcohol to visitors and societies. CASC clubs shouldn’t be holding weddings and conferences for the public. The Bridport evidence has set it out clearly to HMRC. All solicitors were firmly warned that we must report tax avoidance schemes and tax evasion. So that is what those of us who own golf courses have done re Bridport. Amanda Brown, the KPMG solicitor acting in Bridport, may not have received the Law Society guidance the rest of us did. Really the situation is clear. Private members’ golf clubs should be like private members’ clubs in every other walk of life and SHUT THEIR DOORS to non-members. Only be open to proper members – with votes, shares, rights to stand for office, paying full fees and so on. Too many members’ clubs hoodwink HMRC by saying they make a loss on green fees, societies, conferences and weddings. Here’s a simple message from all proprietary clubs. Then stop doing them. Close your doors and stop the fiddles. AGCO hasn’t lost any appeal. We have one in the pipeline and the Tribunal system and HMRC have six weeks now to defend our claims on distortion. .

    Reply to this comment
  14. peter June 20, 11:05

    Paul Stewart from KPMG was supposed to be meeting HMRC in early June to enquire about the delay in payments. There’s not long left in June now, why have KPMG not let everyone know whats happening? Maybe there could be some truth in these accusations.

    Reply to this comment
  15. Ed June 20, 10:01

    I find this whole situation and constant in fighting, tiresome, unedifying and most importantly, bad for the sport of golf as a whole.

    All of these bodies, including England Golf, should be working together to grow the game and increase participation, not throwing insults and accusations around. I very much hope that England Golf can get all interested parties in a room and try and find a way forward.

    Reply to this comment
  16. Phil June 20, 08:49

    There is a lot of animosity towards AGCO on this comments page, I run a proprietory golf club and have never been approached by UKGCOA to offer any assistance with regards to a level playing field on VAT. I found out this week that England Golf pays all the costs of UKGCOA. One comment says that my club has an advantage over members clubs. What are they ? We can reclaim the VAT on purchases to run the golf club and course . Quite so but if for example I turn over a million pounds made up as “£500K from memberships and green fees the revenue takes approx “£84K in VAT mypurchases on machinery of “£150K means i can recover £25K vat. We then are lucky to be able to pay full business rates (no CASC for us) and if we do make a profit we are allowed (the revenue actually insists) to pay corporation tax.
    I would rather be disadvantaged like “not for profit” members clubs who keep 100% of their income and obviously pay 20% extra for their equipment ,they can quickly recover this by only paying 20% of the full business rate, and of course as their accountants give them advice to fool the treasury into thinking they have made no profit, they don’t pay corporation tax.
    I am sure that some members golf clubs are run as not for profit concerns. I do not think that the clubs being advised and represented by KPMG fall into that category, One question, where did the “£30 million pounds that KPMG are to receive for their sevices come from ? Possibly out of the profits that no one makes on their hotels wedding venues corporate golf days etc. It seems that an awful lot of members owned clubs spend a fortune generating extra income and openly flout the CASC regulations not to make a profit. Good job for them that the people charged with ensuring that they are being run properly either don’t care or are gaining to much personal benefit to want to rock the boat.

    Reply to this comment
  17. Peter June 19, 18:43

    Ray, if the remarks are slanderous, are KPMG or Bridport GC going to take AGCO to court over them? I sincerely hope they do.

    Reply to this comment
  18. steve rumball June 19, 15:25

    Well Mike, I would love to see your list of advantages that the proprietary clubs have over the private members clubs. I built my own club from scratch and have been running it for 20 years. I think I am a reasonably astute businessman. Private members clubs virtually don’t or just don’t, pay corporation tax on income. Private members clubs get up to 80% reduction on business rates. Private members clubs don’t pay VAT on Subs, and now don’t pay VAT on green fees. Meanwhile, they compete for the same society/corporate/casual golfer green fees and almost all employ managers to “manage the business” with the aim of maximising the revenue to the club. So, those are the basic disadvantages that I have against the private members club.

    Whats your list then?

    Reply to this comment
  19. Chris June 19, 14:01

    If a private members club sells the club the money is distributed to the individual members, that is what the entrance fee was supposed to represent. The members own the club. The individual members will make the profit . The above comments are cynical.

    The law which states that members clubs are largely not subject to VAT, tax and business rates is the way it is because politicians, judges and employees of the inland revenue on the whole play at members clubs. That is why HMRC stated that corporate groups and societies are “individuals” for VAT purposes for example. They did not have to do so, they wanted it that way.

    This is why Vivian Saunders efforts at achieving fairness in golf using logic and reason are doomed to fail, as long as the public and media remain ignorant of course.

    Reply to this comment
  20. David June 19, 13:14

    Societies and Corporate golf days are merely groups of individuals. The Canterbury Hockey Club case judgement clearly states they are exempt from VAT when playing at a NPMO. If Vivien Saunders sold her golf club she can put all the money into her purse and walk away having profited from amateur sport. A private members club cannot, and that is the difference. If she wants VAT exempt status she should stop calling private members clubs fraudulent and tax avoiders and become non profit making. It’s as simple as that.

    Reply to this comment
    • jon June 19, 18:31

      David, you don’t seem to quite grasp this. If your golf club has hosted a corporate or company day the VAT will have already been claimed back as a business expense by the company. So a club can’t claim it back as well.

      Reply to this comment
  21. Ray Rudd June 19, 13:09

    AGCO employs amateur detectives and then on the evidence they supply makes slanderous remarks against Bridport and KPMG. Wise move AGCO. Looks like sour grapes to me and they don’t appear to have their members interests at heart or they would look for a resolution for VAT in sport as a whole going forward.

    Reply to this comment
    • john June 20, 10:54

      Ray I think you will find that AGCO have been trying to get a reduced rate of VAT across all sports for many years.

      AGCO has made many so called ‘slanderous’ statements accusing many high profile clubs,KPMG, England golf and their officials and UKGCOA. Yet funnily enough no one has ever come back over them, could this be because they are actually true?

      Reply to this comment
  22. MIKE June 19, 12:21

    Having had their own appeal fail you have to wonder when AGCO and in particular Vivien will move on. If it would have been the other way would they have made such a fuss??

    In my opinion clutching at straws, and nothing is going to change because they feel hard done by.

    They would get more sympathy if we found a way to work together. What about the advantages the propriety clubs get over the members clubs?

    Unfortunately AGCO and Vivien have lost their case, this is not the fault of the private members clubs!

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